Dow climbed 108 to go over 33K, advancers over decliners 5-2 & NAZ soared 208. The MLP index added 1+ to the 166s & the REIT index went up 3+ to the 404s. Junk bond funds crawled higher & Treasuries were purchased, lowering yields. Oil was only even in the 59s & gold added 12 to 1728.
AMJ (Alerian MLP index tracking fund)
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The number of Americans filing for first-time unemployment benefits unexpectedly rose last week, according to the Labor Dept. Data showed 719K Americans filed first-time jobless claims last week. The forecast was expecting 680K filings. The prior week's reading was revised down to 658K from 684K. The increase comes a week after first-time filings fell to their lowest level since the onset of the COVID-19 pandemic. Continuing claims for the latest week, meanwhile, rose to 3.79M, up from last week's downwardly revised 3.84M. The forecast was for 3.77M Americans would file for continuing claims. Pres Biden unveiled his more than $2T infrastructure plan, the so-called American Jobs Plan, which he billed as a “once-in-a-century capital investment” in US infrastructure that will create Ms of good-paying jobs. The US economy has since the onset of the COVID-19 pandemic lost about 9M jobs that have not yet been recovered. An update on the health of the labor market is due tomorrow with the release of the Mar jobs report. The forecast is for nonfarm payrolls to add 647K new nonfarm jobs as the unemployment rate falls to 6%, the lowest since Mar 2020
719,000 Americans file for first-time unemployment benefits
Pres Biden unveiled a more than $2T infrastructure package as the administration shifts its focus to bolstering the post-pandemic economy. The plan Biden outlined includes roughly $2T in spending over 8 years & would raise the corp tax rate to 28% to fund it. The pres called it a vision to create “the strongest, most resilient, innovative economy in the world” — & Ms of “good-paying jobs” along the way. The White House said the tax hike, combined with measures designed to stop offshoring of profits, would fund the infrastructure plan within 15 years. While Dems narrowly control both chambers of Congress, the party faces challenges in passing the infrastructure plan. The GOP broadly supports efforts to rebuild roads, bridges & airports & expand broadband access, but Reps oppose tax hikes as part of the process. Senate Minority Leader Mitch McConnell said he is “not likely” to support the proposal because of the tax increases. Pres Biden called McConnell on Tues to brief him on the plan.
Biden unveils his $2 trillion infrastructure plan
A measure of US manufacturing activity soared to its highest level in more than 37 years in Mar, driven by strong growth in new orders, the clearest sign yet that a much anticipated economic boom was probably underway. The Institute for Supply Management (ISM) said its index of national factory activity jumped to a reading of 64.7 last month from 60.8 in Feb. That was the highest level since 1983. A reading above 50 indicates expansion in manufacturing, which accounts for 11.9% of the US economy. The forecast called for the index rising to 61.3 in Mar. The year-long Covid-19 pandemic has boosted demand for goods. Economic growth is expected take off this year, juiced up by the White House's massive $1.9T pandemic relief package & the reopening of nonessential businesses as more Americans are vaccinated against the coronavirus. The relief package passed last month is sending additional $1400 checks to qualified households & extending the government safety net for the unemployed. Households have also accumulated about $19T in excess savings, which are expected to fuel pent-up demand. Pres Biden unveiled a plan to spend roughly $2T on infrastructure like roads & bridges over 10 years. Q1 GDP estimates are as high as a 10.0% annualized rate after the economy grew at a 4.3% pace Q4. Growth this year could top 7%, which would be the fastest since 1984. The economy contracted 3.5% in 2020, the worst performance in 74 years. But the massive fiscal stimulus could leave the economy pushing against domestic capacity constraints & fan inflation. Suppliers are already struggling to deliver materials to manufacturers, pushing up production costs. That has been most evident in the automobile industry, where a global semiconductor chip shortage has forced cuts in production. The ISM survey's measure of prices paid by manufacturers last month hovered near its highest since 2008. Its forward-looking new orders sub-index jumped to 68.0 in Mar. That was the highest reading since 2004 & was up from 64.8 in Feb. Factories also received more export orders, while order backlogs swelled. There is room for further expansion, with inventories at manufacturers & their clients still lean. With demand robust, factories hired more workers in Mar. The survey's manufacturing employment gauge shot up to 59.6, the highest reading since Feb 2018, from 54.4 in Feb.
U.S. manufacturing sector index races to 37-year high in March
A strong manufacturing sector is powering the economy ahead. This data suggests Q1 & 2021 should be excellent for the economy. However the 700K filing unemployment claims (up from 200K+ in the good old days of 2019) are still hurting. And the dark cloud of higher inflation is not going away any time soon. Meanwhile the bulls are happy to see the S&P 500 go over 4K for a new record.
Dow Jones Industrials
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